B&B Must Pay Insurer|for Paralyzed Farmhand

(CN) – A high-end bed and breakfast whose farmhand was severely injured by a cow owes an insurer nearly $583,000 in attorneys’ fees and costs after a jury found it liable for insurance fraud, a federal judge ruled. Jason Angstadt was working on Albert Granger’s farm at Glasbern Inn in Fogelsville, Pa., on June 11, 2010 when a 1,200-pound Devon cow that had just given birth suddenly charged and barreled into him, rendering him a paraplegic. Zenith Insurance Co., a California-based subsidiary of the Canadian financial holding company Fairfax Financial, investigated Angstadt’s claim later that month and began paying him worker’s compensation benefits. The insurer filed a federal lawsuit in 2010 against Wells Fargo, the insurance broker for Glasbern Inc.’s employees, seeking to recover the money it paid to Angstadt. Zenith said it would not have carried the inn’s policy had it known there were animals on the property, according to local media reports. The insurer added Glasbern Inc. and its 81-year-old owner as defendants almost a year later, in August 2011, alleging violations of the Pennsylvania Insurance Fraud Act and negligent misrepresentation for omitting information about their farming activities. Zenith sought damages for past payments to Angstadt, a declaratory judgment with respect to future payments, and counsel fees and costs. Though a jury in June found that the insurer had contributed to some of the alleged negligence, it found Glasbern Inc. and Granger liable for insurance fraud. Zenith was awarded more than $1 million in damages, and Glasbern and Granger were ordered to reimburse the insurer for any future payments it made to or on behalf of Angstadt. Last Tuesday, U.S. District Judge Harvey Bartle III in Philadelphia ruled that Zenith was entitled to nearly $583,000 of the roughly $900,000 in attorneys’ fees and costs it sought. Zenith’s attorneys may be compensated for their post-trial conference work, Bartle ruled, but their use of three attorneys before and during trial was unreasonable. “We agree that the use of three attorneys for these tasks is excessive and unnecessary as a charge against Glasbern Inc. and Granger, and will accordingly reduce the counsel fees by the amount attributable to the third attorney’s time on those tasks,” Bartle wrote. “Such a deduction amounts to $26,320.” The court deducted another $2,500 for time Zenith’s lawyers spent reviewing Wells Fargo’s trial exhibits and its expert’s report and deposition. “It is reasonable for plaintiff to include some time spent working on developing its case against both Wells Fargo and Glasbern Inc. and Granger since the claims related to many of the same facts and involved similar theories of recovery,” Bartle explained. “Nonetheless, it would be inequitable under the present circumstances to charge Glasbern Inc. and Granger for the entire time spent investigating claims against them and developing theories involving both them and Wells Fargo before the filing of the amended complaint.” As for fees, Bartle said Zenith could be reimbursed for its attorneys’ travel expenses but not their meals. The court discounted the remaining total by one third to account for time Zenith spent pursuing claims that were ultimately unsuccessful, making the total award nearly $583,000. Fairfax Financial reported more than $8 million in revenue in 2012.